Lexar Media (LEXR) swung to a loss in the second quarter as the company was hit by higher price reductions and poor cost-reduction timing.
The company expects additional price declines to hurt third-quarter results.
The Fremont, Calif.-based maker of flash memory cards said it lost $18.1 million, or 23 cents a share, in the second quarter, compared with net income of $7 million, or 9 cents a share, a year earlier. Analyst consensus expected a net loss of 19 cents a share.
The company had warned about the quarter's performance on June 29, when it lowered its forecast from one given in April, when it said it saw revenue of about $190 million and at least break-even EPS.
Second-quarter revenue doubled to $163.2 million from $81.5 million in sales from the same period last year.
"Our second-quarter results reflect greater than anticipated price reductions and price protection obligations that negatively impacted product revenues and gross margins, coupled with the inability to fully recognize the benefits of lower costs achieved during the quarter due to the timing of cost reductions, component purchases and product shipments," said Eric Stang, Lexar's chairman, CEO and president.
Expecting additional flash-card cost reductions in the second half along with continued price declines in the third quarter, and with moderate price declines in the fourth quarter, Lexar said it expects to lose 1 cent to 5 cents a share for the third quarter on roughly $175 million in revenue.
The consensus estimate for the third quarter was a profit of 2 cents a share on revenue of $178 million.
Lexar expects to return to profitability in the fourth quarter.
Shares of Lexar were down nearly 10% in after-hours trading; in the regular session they closed up 42 cents, or 6.9%, to $6.54.